Florida utilities lower power prices during COVID-19
Seven Florida municipal electric utilities recently approved measures to temporarily lower electricity prices to provide financial relief for customers experiencing hardships during the COVID-19 crisis.
“We are doing the right thing, lowering our power costs where we can,” said Jacob Williams, General Manager and CEO of the Florida Municipal Power Agency.
Two FMPA member utilities, Mount Dora and Jacksonville Beach, have agreed to power cost reductions. Mount Dora is reducing its power cost adjustment (PCA) on customers’ bills by about 10% starting in April and running for six months.
Beaches Energy Services in Jacksonville Beach will not charge customers for the bulk power cost adjustment fee in April, resulting in about a 20% reduction for a typical residential customer.
Another FMPA member, Leesburg, is suspending its PCA for May and June.
In addition, about a dozen other FMPA public power utilities are considering short-term reductions in their PCA, but “not all cities will be able to offer this due to various financial situations,” Williams said.
FMPA is a wholesale generator that provides power and other value-added services to 31 public power utilities in Florida.
JEA, the public power utility serving Northeast Florida, is also giving customers a break on their May electric bills. The utility is providing a total of $27 million in fuel credits that are estimated to save the typical residential customer about 23% on their May bill.
Homestead and Green Cove Springs are the most recent FMPA members to announce that they would reduce their power costs. Homestead Electric Utility Director Barbara Quoiñones, who is also Chair of FMPA’s Board of Directors said, “Each of us is responding to the needs of our customers and communities in unique ways. Many people are already experiencing financial challenges, so anything that we can do to make it easier for our customers is greatly needed.”
On April 6, the Lakeland City Commission voted to lower the electric fuel charge for Lakeland Electric customers for May and June.
After giving a presentation at a Utility Committee meeting, staff recommended an emergency fuel rate adjustment to provide emergency relief to customers in the midst of the COVID-19 pandemic.
The fuel charge will be lowered by $7.00 from $27.00 per 1000 kWh to $20.00 per 1000 kWh for May and June for an additional savings of approximately 7%. This emergency fuel rate is expected to be restored to its normal rate in July.
This 26% emergency fuel rate decrease is in addition to the 17.5% fuel rate decrease that began April 1.
Most power generation in Florida fueled by natural gas
Most power generation in Florida is fueled by natural gas, which has been trading at low prices, reducing wholesale generation costs. For members who derive all their power from FMPA, the agency estimates its actual power costs for the year will be below $68 per megawatt hour (MWh), compared with a budget estimate of $74.5/MWh and last year’s cost of $71.24/MWh.
FMPA’s estimate for its all-requirements customers includes a projected 3%-5% load loss for the rest of the fiscal year because of COVID-19, but that loss load cost increase is expected to be offset by lower natural gas prices that fuel more than 80% of FMPA’s generation.
Natural gas is trading at about $1.60 per million British thermal units (MMBtu) versus FMPA’s forecasted or budgeted prices of just under $3/MMBtu, which FMPA estimates could lead to a savings of about $10/MWh.
In an email to FMPA’s board of directors, Williams encouraged them to consider using low gas prices to give relief to members and their customers hit by the COVID-19 crisis.
Williams said FMPA is prepared to help members complete a financial analysis of alternatives to help provide financial assistance to customers hit by the COVID-19 crisis and is providing communications support for members, as well.